COLLEGE RETIREMENT EQUITIES FUND
730 Third Avenue
New York, New York 10017-3206
NOTICE OF ANNUAL MEETING -- NOVEMBER 10, 1997
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Notice is hereby given to persons having voting rights in respect of the College
Retirement Equities Fund ("CREF") that the annual meeting of participants will
be held at CREF's home office, 730 Third Avenue, New York, New York, on November
10, 1997, at 10:00 a.m. for the following purposes:
1. To elect four trustees to serve for the next four years and until their
successors are elected and qualified;
2. To ratify the selection of Ernst & Young LLP as the independent
auditors for CREF for the fiscal year ending December 31, 1997;
3. To vote on the participant proposals set forth and described in the
accompanying proxy statement; and
4. To transact any other business as may properly come before the meeting.
The Board of Trustees has set September 30, 1997, as the record date for
determination of the number of votes entitled to be cast. Only those persons who
had CREF voting rights as of September 30, 1997, are entitled to notice of and
to vote at the meeting.
By order of the Board of Trustees,
/S/ALBERT J. WILSON
-------------------
Albert J. Wilson
Secretary
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE, AND
RETURN THE ENCLOSED PROXY CARD AS SOON AS POSSIBLE IN THE ENCLOSED ADDRESSED AND
POSTPAID ENVELOPE.
TO HOLD THE MEETING, A QUORUM OF THE SHARES ELIGIBLE TO VOTE IS REQUIRED BY LAW
TO BE REPRESENTED. THEREFORE, IT IS IMPORTANT THAT YOU VOTE NOW SO THAT CREF
WILL NOT HAVE TO BEAR THE UNNECESSARY EXPENSE OF ANOTHER SOLICITATION OF
PROXIES.
If you plan to attend the meeting, please call 800 842-2776 to obtain an
admission pass.
[CREF LOGO]
October 13, 1997
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COLLEGE RETIREMENT EQUITIES FUND
PROXY STATEMENT FOR ANNUAL MEETING
TO BE HELD ON NOVEMBER 10, 1997
The accompanying proxy is solicited on behalf of the Board of Trustees of the
College Retirement Equities Fund ("CREF") and will be voted at the annual
meeting of persons having CREF voting rights and at any adjournment thereof. The
annual meeting of CREF will be held on November 10, 1997, at 10:00 a.m. at
CREF's home office, 730 Third Avenue, New York, New York. The approximate
mailing date of this proxy statement is October 13, 1997.
Please mark and sign the enclosed proxy card and return it for use at the
meeting. Each proxy may be revoked at any time before it is voted by written
revocation addressed to the Secretary of CREF at 730 Third Avenue, New York, New
York 10017-3206. You may also revoke your proxy by executing and returning a
later-dated proxy card or by appearing in person and voting at the meeting. All
proxy cards that are properly signed, timely received, and not revoked will be
voted at the meeting in accordance with the instructions on them, if any. Unless
instructions to the contrary are received, the proxy will be voted FOR the
election of the four nominees for trustee and FOR ratification of Ernst & Young
LLP as independent auditors for CREF for the fiscal year ending December 31,
1997, and AGAINST the participant proposals set forth and described in this
proxy statement. Only participants in certain accounts will be eligible to vote
on the participant proposals. The following table sets forth the voting rights
of CREF participants for each item on the proxy card:
STOCK, MONEY MARKET,
BOND MARKET,
INFLATION-LINKED
BOND, GLOBAL SOCIAL
EQUITIES, GROWTH, AND CHOICE
ALL EQUITY INDEX ACCOUNTS ACCOUNT
ACCOUNTS ONLY ONLY
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Trustee Election X
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Independent Auditors X
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Participant Proposal I X
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Participant Proposal II X
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The Board of Trustees knows of no other matters to be presented at the
meeting. If, however, other matters are properly brought before the meeting, it
is the intention of the persons named in the accompanying proxy to vote the
proxies in accordance with their best judgment, and discretionary authority to
do so is included in the proxy.
Each person having voting rights on September 30, 1997, is eligible to vote
at the meeting. On September 20, 1997, there were a total of 118,281,262,240.32
votes eligible to
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be cast. Of the total number of votes, 99,215,542,074.60 were attributable to
the Stock Account; 4,115,910,666.39 were attributable to the Money Market
Account; 1,247,151,903.09 were attributable to the Bond Market Account;
87,652,069.26 were attributable to the Inflation-Linked Bond Account;
2,116,066,512.94 were attributable to the Social Choice Account;
5,462,608,589.82 were attributable to the Global Equities Account;
4,358,309,740.14 were attributable to the Growth Account; and 1,678,020,684.08
were attributable to the Equity Index Account. As of September 20, 1997,
Teachers Insurance and Annuity Association of America ("TIAA"), CREF's companion
organization, owned 2,000,000 accumulation units in the Inflation-Linked Bond
Account, representing approximately 59 percent of that account's outstanding
units. As of that date, TIAA was entitled to cast .04 percent of the total
number of votes eligible to be cast on those matters described in this proxy
statement on which all participants are entitled to vote.
The number of votes attributable to a person with a CREF accumulation is
equal to the dollar value of the amount credited to that person in the
accumulation fund of each CREF account on September 30, 1997. If annuity
payments are being made, the number of votes for an annuitant is equal to the
number of dollars held in the annuity fund of each CREF account on September 30,
1997, to meet the annuity obligations to that person. Fractional votes will be
counted.
VOTE REQUIRED
CREF's constitution provides that the holders of 10 percent of the votes
entitled to be cast will constitute a quorum at the meeting. The vote of persons
holding a majority of the votes present in person or represented by proxy at the
meeting and entitled to vote will decide the outcome of the election of
trustees, the ratification of the appointment of the independent auditors, and
the participant proposals. Abstentions are counted in determining whether a
quorum has been reached.
When the quorum requirements are met, abstentions are not counted in
determining the outcome of the election of trustees, the ratification of the
appointment of independent auditors, or the participant proposals, or any other
matters that may be brought to a vote at the meeting that require only a
majority of shares present to be passed. No votes are cast by brokers.
I. ELECTION OF TRUSTEES
CREF's constitution provides that the Board of Trustees is divided into four
classes, with each class elected for a term of four years. The constitution was
recently amended to reduce the number of trustees in this and each future class
from five to four, thereby, over time, reducing the total number of trustees
serving on the board to sixteen. At this annual meeting, four trustees are to be
elected to serve for four years and until their successors are elected and
qualified. All of the nominees currently serve on CREF's Board of Trustees and
have been renominated to serve for another term.
Set forth below is information concerning the age, principal occupation,
employment during the past five years, educational background, and certain other
directorships of each nominee and continuing trustee, as well as the year in
which each individual first became a trustee.
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NOMINEES FOR TRUSTEE
| | JOYCE A. FECSKE, 50, is vice president emerita at DePaul
| | University. Until February 1994, she was vice president for
| PHOTO | human resources at DePaul University. Ms. Fecske also serves as
| | a trustee of TIAA-CREF Mutual Funds. Ms. Fecske received a B.A.
| | and an M.A. from DePaul University. She has been a CREF
| | participant since 1976.
Trustee since
1993
| | EDES P. GILBERT, 65, is head of The Spence School. Previously,
| | she was headmistress of the Mary Institute. Ms. Gilbert also
| PHOTO | serves as a trustee of Lesley College, the Friends Seminary, and
| | TIAA-CREF Mutual Funds. After receiving a B.A. from Vassar
| | College, Ms. Gilbert received an M.Ed. from Lesley College,
| | Graduate School of Education. She has been a CREF participant
Trustee since since 1972.
1989
| | STEPHEN A. ROSS, 53, is the Sterling Professor of Economics and
| | Finance in the Yale School of Management at Yale University. Dr.
| PHOTO | Ross is also co-chairman of Roll & Ross Asset Management Corp.,
| | a director of General Reinsurance Corporation, and a trustee of
| | the Hopkins School and of California Institute of Technology.
| | Dr. Ross also serves as a trustee of TIAA-CREF Mutual Funds. He
Trustee since received a B.S. from California Institute of Technology and a
1981 Ph.D. from Harvard University. Dr. Ross has been a CREF
participant since 1974.
| | MACEO K. SLOAN, 47, has been the chairman, president, and chief
| | executive officer of Sloan Financial Group, Inc., and NCM
| PHOTO | Capital Management Group, Inc. since 1991. Mr. Sloan is a
| | director of SCANA Corporation and Mechanics and Farmers Bank.
| | Mr. Sloan also serves as a trustee of TIAA-CREF Mutual Funds.
| | Mr. Sloan received a B.A. from Morehouse College, an M.B.A. from
Trustee since Georgia State University, and a J.D. from North Carolina Central
1991 University School of Law.
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CONTINUING TRUSTEES
| | ROBERT H. ATWELL, 66, has been president emeritus of the
| | American Council on Education and a senior consultant for A.T.
| PHOTO | Kearney since November 1996. Formerly, he was president of the
| | American Council on Education and Pitzer College. Mr. Atwell is
| | a trustee of St. Norbert College, Eckerd College, and New
| | College Foundation, a director of Education Management Corp.,
Trustee since and on the governing board of COLLEGIS. Mr. Atwell also serves
1989 as a trustee of TIAA-CREF Mutual Funds. Mr. Atwell received a
B.A. from the College of Wooster and an M.A. from the University
of Minnesota. He has been a CREF participant since 1970. His current term as
trustee expires in 1998.
| | ELIZABETH E. BAILEY, 58, is the John C. Hower Professor of
| | Public Policy and Management at The Wharton School of the
| PHOTO | University of Pennsylvania. Formerly, she was a professor at
| | Carnegie Mellon University and dean of its Graduate School of
| | Industrial Administration. Dr. Bailey has been a visiting
| | scholar at Yale University. Dr. Bailey is a director of CSX
Trustee since Corporation, Honeywell Inc., and Philip Morris Companies Inc.
1986 She is a trustee of The Brookings Institution and Bancroft,
Inc., and is a director of the National Bureau of Economic
Research. Dr. Bailey also serves as a trustee of TIAA-CREF Mutual Funds. She
received an A.B. from Radcliffe College, an M.S. from Stevens Institute of
Technology, and a Ph.D. from Princeton University. She has been a CREF
participant since 1983. Her current term as trustee expires in 1998.
| | JOHN H. BIGGS,* 61, is chairman, president, and chief executive
| | officer of CREF and TIAA. Mr. Biggs also serves as a trustee of
| PHOTO | TIAA, TIAA-CREF Investment Management, Inc. ("Investment
| | Management"), TIAA-CREF Individual & Institutional Services,
| | Inc. ("Services"), and TIAA-CREF Mutual Funds, and is a director
| | of Teachers Personal Investors Services, Inc. ("TPIS"), and
Trustee since Teachers Advisors, Inc. ("Advisors"). Mr. Biggs is a director of
1983 The Boeing Company, Ralston Purina Company, and the National
Bureau of Economic Research. He is a trustee of the Association
of Governing Boards of Universities and Colleges, the Church Pension Fund
(Episcopal), The Danforth Foundation, the Financial Accounting Foundation, and
Washington University in St. Louis. He is also a member of the board of
governors of the National Association of Securities Dealers, Inc. Mr. Biggs
received an A.B. from Harvard University and a Ph.D. from Washington University
in St. Louis. He has been a CREF participant since 1977. His current term as
trustee expires in 2000.
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CONTINUING TRUSTEES (continued)
| | GARY P. BRINSON, 53, has been a member of the group executive
| | board of Swiss Bank Corporation since April 1995 and chief
| PHOTO | investment officer and member of its group executive committee
| | since June 1996. He is also president and managing partner of
| | Brinson Partners, Inc., an investment management firm. Mr.
| | Brinson serves as a trustee of the Research Foundation of the
Trustee since Institute of Chartered Financial Analysts. Mr. Brinson also
1995 serves as a trustee of TIAA-CREF Mutual Funds. He received a
B.A. from Seattle University and an M.B.A. from Washington State
University. His current term as trustee expires in 1999.
| | STUART TSE KONG HO, 61, is chairman of the board and president
| | of Capital Investment of Hawaii, Inc., and chairman of the board
| PHOTO | of Gannett Pacific Corporation. He also serves on the boards of
| | Pacific Century Financial Corp., Gannett Co., Inc., and Aloha
| | Airgroup, Inc. Mr. Ho also serves as a trustee of TIAA-CREF
| | Mutual Funds. Mr. Ho received a B.A. from Claremont McKenna
Trustee since College and a J.D. from The University of Michigan School of
1990 Law. His current term as trustee expires in 1998.
| | NANCY L. JACOB, 54, is president and managing partner of
| | Windermere Investment Associates. She was previously chairman
| PHOTO | and chief executive officer of CTC Consulting, Inc. and a
| | managing director of the Capital Trust Company. Formerly, she
| | was a professor of finance in the School and Graduate School of
| | Business Administration at the University of Washington, where
Trustee since she also served as dean. Dr. Jacob also serves as a director of
1979 Puget Sound Power & Light Company and as a trustee of TIAA-CREF
Mutual Funds. She received a B.A. from the University of
Washington and a Ph.D. from the University of California, Irvine. She has been a
CREF participant since 1971. Her current term as trustee expires in 1999.
| | MARJORIE FINE KNOWLES, 58, is a professor of law at Georgia
| | State University College of Law, where she also served as dean
| PHOTO | until 1991. Formerly, she was a professor of law at the
| | University of Alabama College of Law. Ms. Knowles also serves as
| | a trustee of TIAA-CREF Mutual Funds. Ms. Knowles received her
| | A.B. from Smith College and her LL.B. from Harvard Law School.
Trustee since She has been a CREF participant since 1976. Her current term as
1983 trustee expires in 2000.
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CONTINUING TRUSTEES (continued)
| | MARTIN L. LEIBOWITZ,* 61, has been vice chairman and chief
| | investment officer of CREF and TIAA since November 1995. He was
| PHOTO | executive vice president, Investments, CREF and TIAA, from June
| | 1995 to November 1995. Formerly, he was a managing director,
| | director of research, and a member of the executive committee of
| | Salomon Brothers Inc. Mr. Leibowitz is a trustee of TIAA,
Trustee since Investment Management, and TIAA-CREF Mutual Funds, and a
1995 director of Advisors. He is also president and chief executive
officer of Investment Management and Advisors. In addition, Mr.
Leibowitz is a trustee of Princeton's Institute for Advanced Study, a member of
the board of overseers of the New York University Stern School of Business, a
director of the Institute for Quantitative Research in Finance, and chairman of
the board of governors of the New York Academy of Sciences. He received a B.A.
and an M.S. from the University of Chicago, and a Ph.D. from New York
University's Courant Institute of Mathematical Sciences. He has been a CREF
participant since 1996. His current term as trustee expires in 1999.
| | JAY O. LIGHT, 56, is a professor of business administration at
| | Harvard University Graduate School of Business Administration.
| PHOTO | In addition, Dr. Light is a director of United Asset Management,
| | the Harvard Management Company, the Baupost Fund, and the GMO
| | Trust. Dr. Light also serves as a trustee of Brigham and Women's
| | Hospital and TIAA-CREF Mutual Funds. He received a B.E.P. from
Trustee since Cornell University and a D.B.A. from Harvard University. Dr.
1987 Light has been a CREF participant since 1972. His current term
as trustee expires in 1999.
| | BEVIS LONGSTRETH,* 63, is a partner at the law firm of Debevoise
| | & Plimpton and is an adjunct professor at Columbia University
| PHOTO | School of Law. Mr. Longstreth is a member of the board of
| | directors of Capstead Mortgage Corporation and AMVESCAP, PLC. He
| | is also a member of the board of governors of the American Stock
| | Exchange and a trustee of the New School for Social Research and
Trustee since TIAA-CREF Mutual Funds. Mr. Longstreth received a B.S.E. from
1996 Princeton University and a J.D. from Harvard University. His
current term as trustee expires in 2000.
*Because Messrs. Biggs and Leibowitz are officers of CREF, they are deemed to be
"interested persons" of CREF within the meaning of the Investment Company Act of
1940. Mr. Longstreth is considered an "interested person" of CREF because he is
a partner in a law firm that has acted as counsel to CREF.
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CONTINUING TRUSTEES (continued)
| | ROBERT M. LOVELL, JR., 67, is a founding partner of First
| | Quadrant L.P., an investment management firm. Previously, he was
| PHOTO | chairman and chief executive officer of First Quadrant Corp.,
| | its predecessor. Mr. Lovell also serves as a trustee of
| | TIAA-CREF Mutual Funds. Mr. Lovell received his B.A. from
| | Princeton University. His current term as trustee expires in
Trustee since 2000.
1977
| | EUGENE C. SIT, 59, is chairman, chief executive, and chief
| | investment officer of Sit Investment Associates, Inc., and
| PHOTO | chairman and chief executive officer of Sit-Kim International
| | Investment Associates, Inc. Both are investment management
| | firms. He also serves as chairman and director of eleven
| | registered investment companies managed by Sit Investment
Trustee since Associates, Inc. Mr. Sit serves as a trustee of the Research
1991 Foundation of the Institute of Chartered Financial Analysts and
Carleton College. Mr. Sit also serves as a trustee of TIAA-CREF
Mutual Funds. He received a B.S.C. from DePaul University. His current term as
trustee expires in 1999.
| | DAVID K. STORRS, 53, has been president and chief executive
| | officer of Alternative Investment Group, L.L.C., an investment
| PHOTO | management firm, since August 1996. From January 1996 to June
| | 1996, he was adviser to the president, The Common Fund, a
| | collective investment vehicle for college and university
| | endowments. He had been president and chief executive officer of
Trustee since The Common Fund since January 1993. Formerly, he was executive
1994 vice president of The Common Fund. He is also a director of
eleven money market funds sponsored by Alliance Capital
Management. Mr. Storrs also serves as a trustee of TIAA-CREF Mutual Funds. He
received a B.A. from Yale University and an M.B.A. from Harvard University
Graduate School of Business Administration. He has been a CREF participant since
1975. His current term as trustee expires in 1998.
| | ROBERT W. VISHNY, 38, is the Eric J. Gleacher Professor of
| | Finance at the University of Chicago Graduate School of
| PHOTO | Business. He is the director of the program in corporate finance
| | at the National Bureau of Economic Research and a founding
| | partner of LSV Asset Management, an investment management firm.
| | Dr. Vishny also serves as a trustee of TIAA-CREF Mutual Funds.
Trustee since Dr. Vishny received an A.B. from The University of Michigan and
1996 a Ph.D. from the Massachusetts Institute of Technology. He has
been a CREF participant since 1985. His current term as trustee
expires in 2000.
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As of September 20, 1997: (1) none of the trustees individually owned as much
as 1 percent of the outstanding voting securities of any CREF account; and (2)
trustees and officers, as a group, did not own more than 1 percent of the
outstanding voting securities of any account.
Each of the nominees is available and has consented to serve if elected. If
any of these persons is unavailable to serve at the time the meeting is held,
the votes represented by the proxy may be voted for any substitute designated by
the current Board of Trustees.
COMMITTEES
At each annual meeting of trustees, the board appoints certain committees
with specific responsibilities for various aspects of CREF's operation. Included
among these are:
(1) An Audit Committee, consisting solely of trustees who are not officers of
CREF, which itself, or through independent auditors or others, audits and
examines the records and affairs of CREF as it deems necessary. During 1996, the
Audit Committee held five meetings. The current members of the Audit Committee
are Dr. Bailey (chair), Dr. Jacob, Ms. Knowles, Mr. Lovell, and Mr. Sloan.
(2) A Finance Committee, which oversees the management of CREF investments
in accordance with appropriate oversight by the full board. During 1996, the
Finance Committee held six meetings. The current members of the Finance
Committee are Mr. Biggs (chair), Mr. Brinson, Mr. Ho, Dr. Jacob, Mr. Leibowitz,
Dr. Light, Mr. Longstreth, Mr. Lovell, Dr. Ross, Mr. Sit, Mr. Sloan, Mr. Storrs,
and Dr. Vishny.
(3) A Nominating and Personnel Committee, consisting solely of trustees who
are not officers of CREF, which nominates certain CREF officers and the standing
committees of the board, and recommends persons for election as trustees. During
1996, the committee held six meetings. The current members of the Nominating
and Personnel Committee are Mr. Atwell (chair), Dr. Bailey, Dr. Jacob, Mr.
Longstreth, and Mr. Sit.
The Nominating and Personnel Committee will consider potential nominees for
trustees recommended by participants. Any participant desiring to present a
candidate to the committee for future consideration should write the name of the
individual in the space provided on the proxy card. In addition, participants
may recommend nominees to the CREF Board of Overseers by writing to: Secretary,
CREF Board of Overseers, 730 Third Avenue, New York, New York 10017-3206.
MEETINGS
There were four meetings of the Board of Trustees during 1996. All trustees
except Dr. Nancy L. Jacob attended at least 75 percent of the total number of
meetings of the Board of Trustees and of the committees of the board on which
they served.
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COMPENSATION OF TRUSTEES
The following table discloses the aggregate compensation paid to trustees who
are not officers of CREF ("non-officer trustees") and the lump-sum deferred
compensation benefit accrued as part of CREF's expenses for each non-officer
trustee, for the year ended December 31, 1996.
LUMP-SUM
DEFERRED COMPENSATION
AGGREGATE BENEFIT ACCRUED
COMPENSATION AS PART OF CREF
NAME OF TRUSTEE FROM CREF EXPENSES 1
Robert H. Atwell $40,000 $13,095
Elizabeth E. Bailey $45,000 $8,159
Andrew F. Brimmer $117,000 2 $15,655
Gary P. Brinson $23,000 $2,380
Joyce A. Fecske $27,000 $2,268
Edes P. Gilbert $33,000 $10,481
Stuart Tse Kong Ho $28,000 $7,668
Nancy L. Jacob $29,000 $8,021
Marjorie Fine Knowles $37,000 3 $8,994
Jay O. Light $25,000 $6,065
Bevis Longstreth 4 $2,000 $4,052
Robert M. Lovell, Jr. $32,000 3 $23,730
Robert C. Merton $81,000 2 $10,437
Stephen A. Ross $31,000 3 $6,774
Eugene C. Sit $28,000 $5,568
Maceo K. Sloan $34,000 $2,425
Harry K. Spindler $40,000 5 $17,346
David K. Storrs $40,000 $2,530
Robert W. Vishny 4 $3,000 $592
(1) Assumes service through age 70.
(2) Includes $90,000 deferred compensation benefit paid to Dr. Brimmer and
$60,000 deferred compensation benefit paid to Dr. Merton in accordance with plan
provisions.
(3) This compensation was not actually paid based on prior election of
trustee to defer receipt of payment in accordance with the provisions of a CREF
deferred compensation plan for non-officer trustees. This plan was terminated as
to future participation effective August 1986. In addition, $594,590, $509,477,
and $532,963 have been deferred for prior years' service through year-end 1995
for Ms. Knowles, Mr. Lovell, and Dr. Ross, respectively. (These amounts include
interest.)
(4) Mr. Longstreth and Dr. Vishny were elected to the CREF Board of Trustees
in November 1996.
(5) Mr. Spindler discontinued his deferred compensation agreement as of
December 31, 1993. A total of $425,805 had been deferred for his prior years'
service. (This amount includes interest.)
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The CREF deferred compensation plan provides non-officer trustees who have
served at least five years a lump-sum deferred compensation benefit after
leaving the CREF board. The lump-sum benefit is calculated by taking half of the
amount of the basic trustee stipend in effect at the time the trustee leaves the
board, and multiplying it by the individual's number of years of service as a
CREF trustee, up to a maximum of twenty years.
The following table shows the estimated lump-sum deferred compensation
benefit payable to each non-officer trustee when he or she leaves the board and
the years of service used in estimating that benefit.
ESTIMATED
LUMP-SUM
DEFERRED
COMPENSATION YEARS OF
NAME OF TRUSTEE BENEFIT SERVICE 1
Robert H. Atwell $105,000 14
Elizabeth E. Bailey $150,000 20
Andrew F. Brimmer $90,000 2 12
Gary P. Brinson $135,000 18
Joyce A. Fecske $150,000 20
Edes P. Gilbert $97,500 13
Stuart Tse Kong Ho $112,500 15
Nancy L. Jacob $150,000 20
Marjorie Fine Knowles $150,000 20
Jay O. Light $150,000 20
Bevis Longstreth $ 60,000 8
Robert M. Lovell, Jr. $150,000 20
Robert C. Merton $60,000 2 8
Stephen A. Ross $150,000 20
Eugene C. Sit $127,500 17
Maceo K. Sloan $150,000 20
Harry K. Spindler $105,000 14
David K. Storrs $150,000 20
Robert W. Vishny $150,000 20
(1) Assumes trustee leaves the board at age 70.
(2) Deferred compensation benefit paid in accordance with plan provisions.
No non-officer trustee received compensation from any entity that could be
deemed part of a fund complex with CREF for the year ended December 31, 1996.
Trustees who are active officers of CREF or TIAA do not receive any additional
compensation for their services as trustees.
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II. RATIFICATION OF INDEPENDENT AUDITORS
For the fiscal year ended December 31, 1996, Deloitte & Touche LLP
("Deloitte") served as independent auditors to CREF. At a meeting held on May
21, 1997, the CREF Board of Trustees, including a majority of those trustees who
are not "interested persons" of CREF, selected Ernst & Young LLP ("Ernst &
Young") as independent auditors for CREF for the fiscal year ending December 31,
1997, subject to ratification by persons having voting rights in CREF. The
decision to engage Ernst & Young was the result of a process initiated by the
CREF Board of Trustees pursuant to its policy to periodically consider rotation
of CREF's external audit firm. Deloitte's reports on CREF's financial statements
for the years ended December 31, 1996 and December 31, 1995 did not contain an
adverse opinion or a disclaimer of opinion, and were not qualified as to
uncertainty, audit scope, or accounting principles. There were no disagreements
with Deloitte on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure during 1995 and 1996 or
subsequently.
Representatives of Ernst & Young and Deloitte will be present at the annual
meeting to respond to appropriate questions.
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III. ADDITIONAL INFORMATION
EXECUTIVE OFFICERS
Set forth below is information concerning the age, positions, certain
directorships, and offices held during the past five years by each executive
officer of CREF. These executive officers are selected annually by the Board of
Trustees. Messrs. Biggs and Leibowitz, who are trustees and whose positions with
CREF are described above, are not listed again here.
PRINCIPAL BUSINESS OCCUPATION
NAME AGE DURING PAST FIVE YEARS
Richard J. Adamski 55 Vice president and treasurer, CREF and TIAA, since
March 1991. Mr. Adamski is also vice president and
treasurer of TIAA-CREF Investment Management
("Investment Management"), TIAA-CREF Individual &
Institutional Services, Inc. ("Services"), Teachers
Personal Investors Services, Inc. ("TPIS"),Teachers
Advisors, Inc. ("Advisors"), and TIAA-CREF Mutual
Funds.
Diane M. Axelrod 54 Senior managing director-CREF Administration and
Trading, CREF and TIAA, since May 1997; prior to
May 1997, vice president, Administration and
Trading, CREF and TIAA. Ms. Axelrod is also senior
managing director, Administration and Trading,
for Investment Management, Advisors, and TIAA-CREF
Mutual Funds.
Douglas A. Dial 61 Senior managing director-CREF Stock Account, CREF
and TIAA, since May 1997; prior to May 1997, vice
president, CREF and TIAA. Mr. Dial is also senior
managing director and assistant secretary for
Investment Management and Advisors and senior
managing director for TIAA-CREF Mutual Funds.
Scott C. Evans 38 Executive vice president and manager, CREF
Investments, CREF and TIAA, since September 1997;
from March 1997 to September 1997, managing
director-CREF Account, CREF and TIAA; from March
1994 to March 1997, second vice president, CREF and
TIAA; prior to March 1994,assistant vice president,
CREF and TIAA. Mr. Evans is also executive vice
president and manager, CREF Investments, for
Investment Management and Advisors, and managing
director for TIAA-CREF Mutual Funds.
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PRINCIPAL BUSINESS OCCUPATION
NAME AGE DURING PAST FIVE YEARS
Eric E. Fisher 58 Senior managing director-Quantitative Portfolio
Management/Research, CREF and TIAA, since May 1997;
prior to May 1997, vice president, CREF and TIAA.
Mr. Fisher is also senior managing director for
Investment Management, Advisors, and TIAA-CREF
Mutual Funds.
Richard L. Gibbs 50 Executive vice president, Finance and Planning,
CREF and TIAA, since March 1993; prior to March
1993, vice president, CREF and TIAA. Mr. Gibbs is
also executive vice president for Investment
Management, Services, Advisors, TPIS, and TIAA-CREF
Mutual Funds.
Don W. Harrell 59 Executive vice president, External Affairs, CREF
and TIAA, since March 1992; previously,
administrative assistant to U.S. Senator David
Pryor.
Matina S. Horner 58 Executive vice president, Human Resources, CREF
and TIAA, since December 1989; previously,
president of Radcliffe College. Dr. Horner is
chair of the board of trustees of MGH Institute of
Health Professions and Fund for the City of New
York. Dr. Horner also serves as a director of
Boston Edison Company, the Greenwall Foundation,
and The Neiman Marcus Group, and as a trustee of
the Massachusetts General Hospital, the Twentieth
Century Fund, and the Women's Research & Education
Institute.
John J. McCormack 53 Executive vice president, Operations Support, CREF
and TIAA, since November 1995; prior to November
1995, executive vice president, Pension and Annuity
Services, CREF and TIAA. Mr. McCormack is on the
boards of St. Bonaventure University and the
Employee Benefit Research Institute.
Michael T. O'Kane 52 Senior managing director, Investments, CREF and
TIAA, since May 1996; prior to May 1996, managing
director, Investments, TIAA. Mr. O'Kane is also
senior managing director-Securities, for TIAA-CREF
Mutual Funds.
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PRINCIPAL BUSINESS OCCUPATION
NAME AGE DURING PAST FIVE YEARS
John A. Putney, Jr. 58 Executive vice president, Pension and Annuity
Services, CREF and TIAA, since November 1995;
prior to November 1995, executive vice president,
Operations Support, CREF and TIAA.
John A. Somers 53 Executive vice president, Investments, CREF
and TIAA, since April 1996; prior to April
1996, senior vice president, Mortgage and Real
Estate,CREF and TIAA. Mr. Somers is also executive
vice president for TIAA-CREF Mutual Funds.
Charles H. Stamm 58 Executive vice president and general counsel, CREF
and TIAA. Mr. Stamm also serves as a trustee of
Investment Management and Services and as a
director of TPIS and Advisors.
Thomas G. Walsh 55 Executive vice president, Insurance Services, CREF
and TIAA. Mr. Walsh is also the president of TIAA-
CREF Mutual Funds, chairman and director of TPIS,
and a member of the management committee of TIAA
Separate Account VA-1.
Albert J. Wilson 65 Vice president and chief counsel, corporate
secretary, CREF and TIAA, since March 1991. Mr.
Wilson serves on the boards of the Foreign Policy
Association and the Investor Responsibility
Research Center, Inc.
INVESTMENT ADVISORY AND DISTRIBUTION ARRANGEMENTS
Investment Management manages the assets in each CREF account. It is a
nonprofit subsidiary of TIAA, and provides its services for the CREF accounts at
cost. Investment Management is registered as an investment adviser under the
Investment Advisers Act of 1940, although it is not considered an investment
adviser under the Investment Company Act of 1940 because it provides its
services at cost.
CREF's certificates are distributed by Services, another nonprofit subsidiary
of TIAA. Services is registered as a broker-dealer and is a member of the
National Association of Securities Dealers, Inc. The TIAA Board of Overseers, a
New York membership corporation, owns all of the stock of TIAA.
The address for Investment Management and Services is 730 Third Avenue, New
York, New York 10017-3206.
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IV. PARTICIPANT PROPOSALS
PARTICIPANT PROPOSAL I
Because the first participant proposal concerns CREF's tobacco-related
investments, participants in all CREF accounts, except the Social Choice
Account, can vote on it. Since the proposal would affect participants in each of
these accounts differently, the votes will be tallied separately for each
account.
Mr. Eugene Feingold, 352 Hilldale Drive, Ann Arbor, Michigan 48105, owning
9,561.135 accumulation units in the CREF Stock Account and 2,702.937
accumulation units in the Global Equities Account, and Dr. C. Everett Koop, MD,
ScD, 5924 Maplewood Park Place, Bethesda, MD 20814, owning 23.775 annuity units
in the CREF Stock Account, have given notice that they intend to present the
following resolution at the annual meeting:
For both ethical and financial reasons, participants request CREF:
1) To announce that CREF will make no additional tobacco-related
investments, and
2) To begin an orderly divestment of all tobacco investments.
PARTICIPANTS' SUPPORTING STATEMENT
Sponsors of this proposal, a former Surgeon General of the United States and
a past president of the American Public Health Association, call for an end to
the respectable collegiate camouflage CREF provides for the tobacco industry.
CREF's latest annual report shows nearly $1.6 billion invested in tobacco
corporations, most of it in Philip Morris. A Philip Morris director sits on the
CREF board, chairs its Audit Committee, and is a member of its Nominating and
Personnel Committee and its Committee on Corporate Governance and Social
Responsibility.
The tobacco industry spreads addiction, disease and death among young people
throughout the world. Tobacco is directly implicated in almost half a million
deaths a year in the U.S. alone. Tobacco executives have been implicated in
unethical and possibly illegal activities.
Most smokers begin before adolescence. Tobacco investments put CREF
participants in a position of seeking to profit from children's addiction to a
product likely to shorten their lives.
CREF management suggests its Social Choice Account for those who don't wish
to invest in tobacco. However, that account includes bonds and money market
investments, and is therefore not a true substitute for the CREF Stock Account,
as it is more susceptible to inflation. Its existence does not absolve CREF of
its responsibility to refrain from helping promote childhood drug addiction.
CREF management argues that tobacco stocks are a good investment. But public
retirement systems in Florida and Maryland are divesting,citing the riskiness of
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tobacco investments. Other analysts have concluded that the effect of tobacco
divestiture on fund performance is negligible. Over the last five years, the
stock portion of the CREF Social Choice Account, which does not invest in
tobacco, has out-performed the CREF Stock Account, which invests heavily in
tobacco, disproving management's argument that ending tobacco investments would
necessarily weaken performance.
Among many leading educators urging adoption of this proposal is Derek Bok,
former President of Harvard University, one of a dozen universities which
divested their tobacco investments. The Harvard Management Company earned a
return of 33.9% on its U.S. stock portfolio for the 12 months ending June 30,
1996, wholly free of tobacco's ethical and financial hazards.
CREF management says that continued investment in tobacco gives CREF the
opportunity for "an ongoing dialogue with tobacco companies" and has cited some
of CREF's votes at tobacco stockholder meetings. However, CREF has abstained or
voted against stockholder resolutions to combat youth smoking, reduce cigarette
nicotine content, and discourage smoking by pregnant women. In any case, CREF's
"dialogue" seems to have had little effect.
CREF should join those who have already divested their tobacco investments --
among others, Johns Hopkins, City University of New York, Harvard, Haverford,
Smith, Tufts, Wayne State University, the public universities of Texas and
Vermont, public pension plans in several states and cities, and many religious
organizations.
OPPOSING STATEMENT OF THE BOARD OF TRUSTEES
THE BOARD OF TRUSTEES RECOMMENDS A VOTE AGAINST THE PROPOSAL, WHICH IS
CONTRARY TO THE INTERESTS OF PARTICIPANTS.
The Board of Trustees believes that each participant should have the chance
to decide for himself or herself whether to invest in an account that includes
tobacco stocks. This decision should not be made by the Board of Trustees or
even by a vote of all participants.
Because of this conviction, CREF created the Social Choice Account in 1990,
well before the current concerns about tobacco were expressed. The proponents'
criticism of that account's asset allocation is misplaced. Approximately 60
percent of the Social Choice Account is in stocks and 40 percent is in fixed
income, which is a desirable balance for long-term retirement portfolios. The
account's popularity -- over 200,000 participants use it, and it has
approximately $2 billion in assets, which is more than three times the size of
the next largest socially screened fund -- is affirmation of the need for an
account that has both social screens and a fixed-income component.
The trustees could create a tobacco-free investment option for each existing
CREF account, thereby overcoming the proponents' objection. This would splinter
the demand for a social choice account, and each smaller account would be unable
to take advantage of the economies of scale of a large fund like the Social
Choice Account.
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<PAGE>
Other participants could in turn ask us to create other accounts that screen for
one particular activity, such as alcohol and/or weapons manufacturing. Offering
such an array of small, and more expensive, accounts would not well serve our
participants.
If the trustees conclude at any time that tobacco investments are not in our
participants' best financial interests, we will take appropriate action. Tobacco
company stocks have in fact performed well under various circumstances,
including during periods of negative publicity about the industry -- in part
because the prices of these stocks already reflect potential liabilities, such
as the recently negotiated settlement with the state attorneys general.
The trustees believe the proposal will eliminate an important personal choice
that participants are now free to make. We urge a vote against it.
PARTICIPANT PROPOSAL II
Because the second participant proposal concerns a possible new screen for
the Social Choice Account, only participants in the Social Choice Account can
vote on it.
A. Chris Abajian, 202 NW 43rd Street, Seattle, WA 98107-4328, owning 272.288
accumulation units in the CREF Social Choice Account, Mary Lou Finley, 327 29th
Avenue E, Seattle, WA 98112, owning 63.433 accumulation units in the CREF Social
Choice Account, Edward P. Flowers, 382 Mercy Street, Mountain View, CA
94041-2204, owning 14.434 annuity units in the CREF Social Choice Account, David
S. Gordon, 4728 40th Avenue NE #3A, Seattle, WA 98105, owning 845.852
accumulation units in the CREF Social Choice Account, Bruce Hawkins, 61 Henshaw
Avenue, Northampton, MA 01060, owning 7.096 annuity units in the CREF Social
Choice Account, Steven L. Hulbert, 9 Woodcrest Drive, East Moriches, NY
11940-1420, owning 261.493 accumulation units in the CREF Social Choice Account,
Lawrence C. Jones, 712 Woods Road, Vestal, NY 13850-3566, owning 2,147.994
accumulation units in the CREF Social Choice Account, and Frank Zucker, 3808
Interlake Ave. No., Seattle, WA 98103, owning 106.064 accumulation units in the
CREF Social Choice Account, have given notice that they intend to present the
following resolution at the annual meeting:
Participants request that the Board of Trustees make the
following rule:
The TIAA-CREF Social Choice Account shall not invest in
other mutual funds, in banks, in insurance companies, or in
financial services, unless TIAA-CREF has determined that the
institution is following the screens of the Social Choice
Account when it invests this money.
PARTICIPANTS' SUPPORTING STATEMENT
The TIAA-CREF Social Choice Account currently invests approximately 13% in
financial institutions (including banks, insurance companies, miscellaneous
financial services). The money invested in these institutions is invested by
them without regard
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<PAGE>
for the TIAA-CREF Social Choice Fund's social screens. You can thus presume that
a portion of this money is invested in tobacco, weapons, and so on. This is the
reason that some other socially responsible mutual funds, such as PAX World
Fund, do not invest in financial institutions. Investing in financial
institutions is no different than investing in other non-socially responsible
mutual funds, such as Fidelity. Investing in financial institutions provides a
loophole through the social screens of the TIAA-CREF Social Choice Fund.
More alarmingly, the percentage the Social Choice Fund is putting into this
sector has been growing. It is important to stop this trend while the percentage
is still small and the financial impact on the Social Choice Fund is minimal.
There are a few financial institutions that do adhere to the Social Choice
Fund's screens (such as Chicago's South Shore Bank). But these are not the
financial institutions the Social Choice Fund is invested in.
OPPOSING STATEMENT OF THE BOARD OF TRUSTEES
THE BOARD OF TRUSTEES RECOMMENDS A VOTE AGAINST THE PROPOSAL, WHICH IS
CONTRARY TO THE INTERESTS OF PARTICIPANTS.
The Social Choice Account seeks investment returns that reflect the broad
investment performance of the financial markets, while giving special
consideration to social criteria. We do this by avoiding investments in
companies whose business activities do not meet the account's social criteria
screens. We chose the current screens based on the social issues that we believe
most concern our participants. As currently managed, the account has performed
extremely well, at low cost, and with screens that are reasonably convenient to
administer. It is very popular with participants.
The proponents are asking that CREF apply the Social Choice Account's screens
not just to the primary business activities of financial institutions, but also
to their investments. This additional level of scrutiny would at a minimum be
extremely burdensome, if not impossible, to administer. Detailed information
about how banks, insurance companies, and other financial institutions invest
their money is often not publicly available and cannot readily be obtained.
Indeed, to follow the proponents' line of argument to its logical conclusion,
the Social Choice Account would necessarily be required to examine the
investments of a wide variety of companies, since financial institutions are not
the only types of companies that make significant investments. For example, it
is highly unlikely that most companies invest their pension plan assets in
accordance with the Social Choice Account's screens. Assuming we could even get
such information, the account would be closed out of a broad variety of
investments. It could not operate with such extensive constraints.
The approach the resolution requires would also raise financial risks for
Social Choice Account investors. If virtually all financial institutions were
eliminated from
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<PAGE>
the account, as the proponents suggest, the account would lose a significant
element of its diversity, leaving it more vulnerable to market fluctuations.
For these reasons, the board recommends a vote against the proposal.
AGAIN, THE BOARD OF TRUSTEES BELIEVES THE RESOLUTIONS ARE CONTRARY TO THE
INTERESTS OF PARTICIPANTS AND RECOMMENDS A VOTE AGAINST ALL OF THE PROPOSALS.
V. OTHER MATTERS
MEANS OF SOLICITING PROXIES
Typically, this proxy solicitation will be conducted by mail, but it may also
be conducted by telephone, any method of electronic communication, or personal
interview. All expenses incurred in connection with this solicitation of proxies
are borne by CREF and included in the administrative expenses that are paid for
out of the net assets of each account.
PROPOSALS OF PERSONS WITH VOTING RIGHTS
Proposals submitted for presentation at the 1998 annual meeting by or on
behalf of persons with voting rights must be received by CREF no later than June
15, 1998.
ANNUAL REPORTS
If you would like a copy of the most recent CREF semi-annual and annual
reports, please write to CREF at 730 Third Avenue, New York, New York 10017-3206
or call 800 842-2733, extension 5509. You can also view the reports in the
Library section of TIAA-CREF AT YOUR SERVICE on the Internet, or use our on-line
request form to order print versions electronically. Our Web site address is
http://www.tiaa-cref.org.
20
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[LOGO] Printed on recycled paper
<PAGE>
- ----
CREF COLLEGE RETIREMENT
- ---- EQUITIES FUND
1997 PROXY SOLICITED BY THE BOARD OF TRUSTEES
SEQUENCE NO.
- ---------------------------------------
Date
------------------------
- ---------------------------------------
SIGNATURE
When signing above as attorney, executor, administrator, trustee,
guardian, or corporate officer, please give your FULL name and title.
- --------------------------------------------------------------------------------
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
Withhold Vote for
For from all all except
1) Election of trustees [ ] [ ] [ ]
Nominees:
Joyce A. Fecske, Edes P. Gilbert,
Stephen A. Ross, and Maceo K. Sloan
To withhold your vote from any nominee, check the "Vote for all except" box
above and strike a line though the nominee's name.
If you would like to suggest future nominees, please [ ]
check the box at the right and write their names and
affiliations on the back of this ballot.
For Against Abstain
2) Approval of Ernst & Young LLP as auditors: [ ] [ ] [ ]
- --------------------------------------------------------------------------------
THE BOARD OF TRUSTEES RECOMMENDS A VOTE AGAINST ITEM 3.
For Against Abstain
3) Participant Proposal I regarding tobacco- [ ] [ ] [ ]
related investments in the CREF accounts
other than the CREF Social Choice Account:
4) Participant Proposal II applies only to the
CREF Social Choice Account.
- --------------------------------------------------------------------------------
Please detach at perforation before mailing
Please use black or blue ink and mark an X in the appropriate box.
Please sign and date your ballot.
<PAGE>
COLLEGE RETIREMENT EQUITIES FUND
By signing this form, I authorize Nancy L. Jacob, Bevis Longstreth, and David K.
Storrs, singly or together, with power of substitution in each, to represent me
and cast my vote at CREF's annual meeting, and any adjournment or postponement
thereof. They will vote as I instruct. If no directions are given, or if the
instructions are contradictory, the proxies will vote (i) FOR the election of
all listed nominees, (ii) in accordance with the trustees' recommendations on
the other subjects listed on this card, and (iii) at their discretion on any
other matters that may properly come before the annual meeting or if a nominee
is not available for election. The CREF annual meeting will be held on November
10, 1997, at 10:00 a.m. at CREF's home office, 730 Third Avenue, New York, New
York.
Please sign and date this ballot on the reverse side and return it in the
enclosed postage-paid envelope to State Street Bank and Trust Company, P.O. Box
9393, Boston, MA 02205-9972. State Street Bank and Trust Company has been
engaged to tabulate ballots returned by mail to preserve the confidentiality of
your ballot.
SUGGESTIONS FOR FUTURE CREF NOMINEES
Name: __________________________________________________________________________
Institution: ___________________________________________________________________
Name: __________________________________________________________________________
Institution: ___________________________________________________________________
Name: __________________________________________________________________________
Institution: ___________________________________________________________________
<PAGE>
- ----
CREF COLLEGE RETIREMENT
- ---- EQUITIES FUND
1997 PROXY SOLICITED BY THE BOARD OF TRUSTEES
SEQUENCE NO.
- ---------------------------------------
Date
------------------------
- ---------------------------------------
SIGNATURE
When signing above as attorney, executor, administrator, trustee,
guardian, or corporate officer, please give your FULL name and title.
- --------------------------------------------------------------------------------
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
Withhold Vote for
For from all all except
1) Election of trustees [ ] [ ] [ ]
Nominees:
Joyce A. Fecske, Edes P. Gilbert,
Stephen A. Ross, and Maceo K. Sloan
To withhold your vote from any nominee, check the "Vote for all except" box
above and strike a line though the nominee's name.
If you would like to suggest future nominees, please [ ]
check the box at the right and write their names and
affiliations on the back of this ballot.
For Against Abstain
2) Approval of Ernst & Young LLP as auditors: [ ] [ ] [ ]
- --------------------------------------------------------------------------------
THE BOARD OF TRUSTEES RECOMMENDS A VOTE AGAINST ITEM 4.
3) Participant Proposal I does not apply to
the CREF Social Choice Account.
For Against Abstain
4) Participant Proposal II regarding a new [ ] [ ] [ ]
screen for the CREF Social Choice Account:
- --------------------------------------------------------------------------------
Please detach at perforation before mailing
Please use black or blue ink and mark an X in the appropriate box.
Please sign and date your ballot.
<PAGE>
COLLEGE RETIREMENT EQUITIES FUND
By signing this form, I authorize Nancy L. Jacob, Bevis Longstreth, and David K.
Storrs, singly or together, with power of substitution in each, to represent me
and cast my vote at CREF's annual meeting, and any adjournment or postponement
thereof. They will vote as I instruct. If no directions are given, or if the
instructions are contradictory, the proxies will vote (i) FOR the election of
all listed nominees, (ii) in accordance with the trustees' recommendations on
the other subjects listed on this card, and (iii) at their discretion on any
other matters that may properly come before the annual meeting or if a nominee
is not available for election. The CREF annual meeting will be held on November
10, 1997, at 10:00 a.m. at CREF's home office, 730 Third Avenue, New York, New
York.
Please sign and date this ballot on the reverse side and return it in the
enclosed postage-paid envelope to State Street Bank and Trust Company, P.O. Box
9393, Boston, MA 02205-9972. State Street Bank and Trust Company has been
engaged to tabulate ballots returned by mail to preserve the confidentiality of
your ballot.
SUGGESTIONS FOR FUTURE CREF NOMINEES
Name: __________________________________________________________________________
Institution: ___________________________________________________________________
Name: __________________________________________________________________________
Institution: ___________________________________________________________________
Name: __________________________________________________________________________
Institution: ___________________________________________________________________
